In 2021, Bitcoin (BTC) established itself as a global store of value in its monetization cycle. In 2022, the main focus will be on the 2nd phase of the monetization. BTC matures as a medium of exchange.
This is made possible by the basic stability and security of the Bitcoin blockchain and advances in Lightning Network, a second-tier Bitcoin payment technology. The impacts are far-reaching and include the new potential for financial inclusion for the unbanked global population.
On April 5, 2022, Lightning Labs, an infrastructure technology company focused on Lightning Network, led by Elizabeth Stark (CEO) and Olaoluwa Osuntokun (CTO), announced the issuing and ability to transfer stablecoins like Tether (USDT) on the Bitcoin blockchain. Issued assets can be settled on the Lightning Network, and by the end of 2022, Lightning Labs’ pool products will support the liquidity of issued assets in the same way as Bitcoin today.
This utility is made possible by a new protocol called Taro, developed by Osuntokun. Ultimately, Taro will allow all Lightning Network participants to benefit from Lightning’s almost free and instant global transaction capabilities without tolerating the current volatility of BTC.
BTC volatility is also currently optimal for those using Bitcoin’s Lightning Network, such as the 3 million Salvadors reportedly traded in Lightning Network in 2021.
Thanks to Taro, Taproot’s November 2021 activation on Bitcoin Core, the latest major update to the Bitcoin protocol is made possible. Taproot has improved the security, privacy, and transaction throughput of the Bitcoin blockchain, enabling more sophisticated smart contracts on Bitcoin.
Above all, Taro is a proof of how Bitcoin evolve over time. Protocol development focuses on maintaining and optimizing core values for network security and scalability, but as indicated by the Taro’s relationship, “conservative” changes can be built in Bitcoin and Lightning Network.
Bitcoin Utility is important to be properly extended to the software-enforced promise or threat. These rules include BTC, distribution, discharge schedules, compensation methods for mining, and circulation.
Examples of Using Taro in Emerging Markets
The new protocol will diversify the population in which Lightning Network applications and infrastructure can meaningfully serve. Taro makes Lightning Network a useful payment rail for BTC’s less tolerant demographics, including low socio-economic status and people living paycheck to paycheck.
With this development, BTC volatility may be accessed as deemed suitable via way of means of every consumer and averted while losses might be intolerable. In different words, customers can flip the dial up or down on their publicity to volatility.
Using Lightning Network and Taro to earn in USDT or BTC, for example, a recipient can determine whether or not to maintain budget in BTC for long term financial savings or in USDT for fast or near-time period spending. In this way, Taro showcases Bitcoin and Bitcoin`s’ Lightning Network as each a competitor to SWIFT monetary system and to traditional banking.
Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.